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Chairman’s Statement

               Consistent  with  our objective  in  not only    the  marketing and promotion fronts for these
               investing in products development but also       brands, including Nexstgo’s participation in
               in raising the brand awareness of AVITA and      2018’s Consumer Electronics Show (CES) that
               Primus, significant investment was made on       was held in Las Vegas in January of this year.

               Besides the launch of our AVITA Consumer         The Group’s tablet products in   North
               Notebook PCs and Primus B2B/Commercial           America, however, were impacted more
               Notebook PCs, past year also marked the          significantly by the aforementioned increase
               introduction of the Group’s RCA branded          in  the  costs of certain  critical  components,
               tablets in the U.K. and in France, RCA           specifically memory ICs. This industry-wide
               branded and Venturer branded tablets             development resulted in significant pressure
               in South Africa, and Venturer branded            on the profitability of  tablets and  computing
               tablets in India, all handled by the Group’s     devices during the year. Fortunately, as
               fully-owned subsidiary Alco International        prices of such components begin to stabilize,
               Limited. In particular, the sell-through of      retail buyers in North America gradually start
               RCA branded tablets in the UK was very           to return to placing greater quantity orders
               encouraging and it is expected that the          of tablets to the Group as the higher costs
               penetration of RCA branded (as well as           gradually become more easily transferred to
               Venturer branded) tablets in retail channels     consumers via higher retail prices.
               in the U.K. will expand further.

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